Somerville startup Neural Magic, founded by MIT researcher Dr. Alex Matveev and Nir Shavit, a professor in the department of electrical engineering and computer science, is suing social media giant Facebook for stealing and making public "proprietary algorithms that form the heart of Neural Magic’s technology and intellectual property."
One of BostInno's Startups to Watch 2020, Neural Magic sells software that can be installed on a CPU to bring its performance to the same level as that of graphics processing units (GPU).
The lawsuit, filed in the U.S. District Court in Boston last week, alleges Aleksandar Zlateski, the startup's first employee and its technology director, breached the non-disclosure and non-competition agreement Zlateski signed when he left Neural Magic to work for Facebook in July 2019.
The company says Zlateski had access to all of the startup's trade secrets, confidential and proprietary information and business plans for the future. But most importantly, per the lawsuit, Zlateski was one of the people instrumental in creating the software and the source code of its compiler that encapsulates Neural Magic’s proprietary algorithms.
Zlateski, who the lawsuit claims benefited greatly from the mentoring and tutelage provided by Shavit, Matveev and other members of the Neural Magic team, accepted a new position at Facebook to work on technology that he assured would not be related to his work at Neural Magic.
The lawsuit says that in November 2019, Facebook published on GitHub and publicly announced that it had made open-source an algorithm that would enable neural networks to run efficiently on commodity CPUs—essentially, Neural Magic's secret sauce.
Moreover, the lawsuit claims that a Facebook employee publicly thanked Zlateski for his role in cracking this key problem for Facebook’s continued advancement in the world of artificial intelligence.
The three-year-old startup, which raised $20 million in November from marquee investors like Comcast Ventures, NEA, Andreessen Horowitz, Pillar VC and Amdocs, is pioneering a “No-Hardware AI” model with its software-only solution. The software processes deep learning workloads on CPUs, eliminating the need for the specialized hardware usually required for that kind of computation.
By selling software that can be installed on a CPU to bring its performance to the same level of GPUs, the company is taking on industry heavyweights like NVIDIA, AMD and Asus.
The lawsuit goes on to state that Facebook paid no heed to letters sent to both the company and Zlateski by Neural Magic counsel asking to remove the GitHub publication. In a series of letters, the suit says, counsel for Facebook and Zlateski refused to take down the code or agree to cease using Neural Magic’s proprietary and confidential information that Zlateski misappropriated as a Facebook employee.
Neither of the companies was available for comment.
